The historic Colonial Inn, located at 153 W. King St. in Hillsborough, is under contract to potential new buyers. The current owner has until April to sell the property under an agreement with the town. Chuck Liddycliddy@newsobserver.com

The historic Colonial Inn, located at 153 W. King St. in Hillsborough, is under contract to potential new buyers. The current owner has until April to sell the property under an agreement with the town. Chuck Liddycliddy@newsobserver.com

Could the “under contract” sign outside the historic Colonial Inn signal the turnaround that many residents have wanted for the building?

The 10,000-square-foot Colonial Inn, built in 1838, was a popular restaurant in its later years. It closed in 2001, and the building has lingered in disrepair as the town wrestled with owner Francis Henry ever since.

Francis Henry

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The town filed an eminent-domain action in July 2014 for the property at 153 W. King St., but reached a mediated agreement in April that gives Henry time to sell the inn to new owners.

Seagle and Associates is advertising the Colonial Inn for $875,000 – 53 percent more than Henry paid for the property in 2001. The inn is listed in the National Register of Historic Places and is considered a structure contributing to Hillsborough’s historic district.

The town still could buy the property if Henry doesn’t find a suitable buyer by April 9, 2018.

An appraiser previously estimated the inn’s fair market value at $250,000, but a county reassessment last year increased the property’s value to $518,300.

The UNC School of Government’s Development Financial Initiative has estimated renovations could cost another $3 million.

Timothy Allen, with Seagle and Associates, would not name the potential buyers – their names would become public when they close on the deal – but praised what they could bring to the table.

“I think this whole thing’s going to be great for the neighborhood down in Hillsborough, and I know it’s going to sound crazy, but I think it’s going to be good for the state of North Carolina,” he said.

The Colonial Inn is a landmark, and his goal is to find the right person to buy it, Allen said. While everyone who asked about the inn understood its importance to the community, he said, the currently interested buyers “understood the level of investment.”

“They’re very take charge – the people who are at the table – and they are very mindful of what this means to so many people,” Allen said.

State and federal tax credits are currently available for the renovation and repair of historic properties, although the federal historic tax credit, established in the 1970s, could be eliminated under the Republicans’ tax reform plan. That credit allows developers to deduct up to 20 percent of their eligible expenses for historic property projects.

Bob Johnson, with the nonprofit Colonial Inn Preservation Association, said his group moved on after a previous deal with Henry for the inn fell apart. He heard the latest offer involves a local group of restoration professionals who have done similar jobs around the country, he said.

The town played its hand well in getting Henry to agree to an April deadline for selling the property, Johnson said.

“Once we know who it is and once the deal is signed, I think among the people of Hillsborough and the people who love Hillsborough from around the world, there’s going to be an outpouring of support to help get this thing done as quickly as possible,” he said.